“I just want to make sure we’re cutting fat, and not bone or muscle,” I said.
“No, it’s definitely fat,” Nancy said.
“So by doing this, we will not diminish the value you can get out of the show,” I asked for confirmation.
“Nope. I can take meetings just about up until the exhibit hall closes on Wednesday, and after that nobody wants a meeting anyway,” Nancy replied.
“Ok, this sounds good. Wow, we just saved $1,000,” I said.
“It sure does,” Nancy said.
As I’ve mentioned in this column before, for the first few years of healthsystemCIO.com, I was totally focused on top line growth, letting the expenses be what they may, but with Nancy and Kate now on board, I’ve had some bandwidth to revisit the cost side of the ledger to make sure all is right and necessary. And it should come as no shock that there was some low hanging fruit for the picking.
One of the biggest single-ticket expenses for the year (and I’m sure this is true for just about all vendors and publications in healthcare IT) is the HIMSS conference. By simply deciding to look at the way we’re approaching the show, it was clear we didn’t need to be spending as much time there as we had been. Or rather, we could spend just about as much time as we had been and still cut off four nights of hotel room costs for us as a group. That translates into the above $1,000 in cost savings.
And I have to tell you that cutting costs (when that cost is tied to fat) is pretty exhilarating; to me, the experience is similar to figuring out some household wiring or firing up a torch with my father-in-law to change an outside faucet (my son Parker helped). It has to do with growing, conquering, doing the right thing, and in a very important way, getting stronger by getting leaner.
I’ve begun to realize that being as lean and efficient as possible is, perhaps, the second most important tenet upon which a business can be built. The first has always been to be super narrow (and focused) and super deep — only hospital and health system CIOs for us. But now I see the second is a wonderful compliment to the first.
We need look no further than nature to observe confirmation of this virtue. Have you ever seen shows about animals who need amazingly little to survive? And there are other creatures who spring to life in puddles, seemingly emerging from nowhere, during short-lived wet seasons. When the puddles dry up, they disappear, but in fact only to go dormant in the dirt for what could be years until the next rains come.
If there was ever a better lesson for business, I don’t know it. Of course, consultancies have appreciated this model for years, and thus developed a “bench” of talent that can be called up on (on a contract basis) when business is flush, and put back on the bench when demand wanes. Think of an accordion contracting and expanding. The problem, however, can come into this paradise of efficiency if those who are supposed to be waiting on the bench are nowhere to be found when duty calls (they are on other benches too, of course). Then it’s often time to call the B-listers, and that’s when service levels drop.
How does all this relate to running an IT shop? It should be simple, right? You should just take the above principles and run the leanest, meanest, most efficient shop you can, right? We’ll not exactly. You see, I remember from my old days working for others how the budget game works. What should be an exercise in honestly and transparency (which would result in the above clear cut dynamic) isn’t that at all. Rather, it’s a time consuming game of cat and mouse. On the one side, you have to build your budget knowing that those who must review it have to cut a bit in order to feel as if, or look like, they are doing their jobs, thus, much like pricing a house, you factor in a 10-20 percent “negotiable” premium. When they cut the 20 percent, they feel good, and you know they’ve not cut bone. Come in too high on the cost side, and they simply will think you don’t know what you’re doing, and that’s not very good for job security.
Then there is the dynamic that if you do find savings, if you are able to cut costs, you fear to show your hand because you may never get that money back. For example, this year, you could cut some costs, but next year, if they need to be put back in, it will be a hell of a fight to make it happen. Much easier, then, to just leave them in? And therein lies the unfortunate results of the bogus budget dance that takes up thousands of man-hours and results in very little concrete benefit to the business.
If you’ve got a good, honest, transparent budgeting process, God bless you. You are in a very good place. If you don’t, I suggest doing anything you can to infuse those elements into it. And that may mean sitting down with the CEO, CFO and COO for some frank conversations.
“I can do with this much less this year if we really squeeze our belts, but if it hurts too much, can you help me out? If I have to take on more projects to satisfy business demands, I’ll need those resources I’m giving up here.”
With solid interpersonal relationships, much can be accomplished, and you can get that wonderful feeling I alluded to above. Being lean and mean feels good, feels right, make one feel strong. And these days in healthcare, that’s exactly where you want to be.